RULE 7 DUTIES AND RESPONSIBILITIES OF THE BOARD
The Board shall have the following duties and responsibilities:
to receive, evaluate, determine and pay claims;
to promulgate rules of procedure not inconsistent with these Rules;
to prudently invest such portions of the funds as may not be needed currently to pay losses, and to maintain sufficient reserves as appropriate;
to provide a full report at least annually to the Court and to make other reports as necessary;
to publicize its activities to potential claimants, the public and the bar;
to employ adequate staff to assure the Board’s effective and efficient performance of its functions;
to retain and compensate consultants, administrative staff, investigators, actuaries, agents, legal counsel and other persons as necessary;
to prosecute claims for restitution to which the Fund is entitled;
to engage in studies and programs for client protection and prevention of dishonest conduct by lawyers; and
to promote effective communication between lawyer disciplinary authorities and the Fund, and
to perform all other acts necessary or proper for the fulfillment of the purposes and effective administration of the Fund.
In determining the order and manner of payment of claims, the Board should have the discretion to pay in subsequent years all or part of claims that were not fully reimbursed in a prior year.
Investing monies that are not needed to cover current claims permits a reasonable return without risking the integrity of the Fund. The Board should adopt specific guidelines for the investment of funds. Investments should be of appropriate duration to maintain liquidity of assets and enable the Board to promptly pay losses. The nature of the investments may be specifically limited to bonds, notes or securities issued or guaranteed by a state or federal agency, interest bearing accounts or certificates of deposit.
Paragraphs D and E require public information programs. The Board has the affirmative obligation to publicize its activities to both bench and bar. Similarly it is incumbent on the Board to publicize itself to the general public. The fulfillment of both obligations is extremely important to the success of the Fund in achieving its purposes.
As suggested in Paragraph I, the Board also should study and, if appropriate, adopt other potential programs, such as trust account overdraft notification, payee notification, and random audits, to help reduce defalcation.
The Fund’s assets should not be unduly diminished by employing investigative or other personnel whose work would duplicate the efforts of others responsible for investigating lawyers' professional conduct. See Rule 12C regarding the cooperative effort anticipated between the Board and the lawyer discipline agency. Moreover, the Fund shall establish mechanisms to encourage lawyer disciplinary authorities to notify complainants about the existence of the Fund.
The Board should make an attempt to prosecute all claims for restitution. Restitution is one way of replenishing the Fund’s assets. See also , Rule 16 which focuses on subrogation and other methods of restitution.
The Trustees and staff should also participate in seminars and continuing legal educational programs dealing with client protection.
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